Wage Theft Claims Likely to Increase

News March 16, 2023

From 2010 when Miami Dade County first passed an ordinance prohibiting wage theft, the popularization of the term has reframed the non-payment of wage debate across the country. The focus in the early days of wage-theft enforcement was on undocumented workers not being paid, but over the past decade state and federal enforcement agencies have dramatically increased the resources dedicated to investigating and prosecuting wage theft cases to help all categories of workers recover their lawful wages.

The Massachusetts Attorney General’s Fair Labor Division (FLD) has undertaken a significant effort to identify and prevent wage theft. That effort has included outreach to the legal community and monthly wage-theft seminars to educate people on wage theft and available legal remedies. The recently elected Attorney General, Andrea Campbell, has pointed out in interviews that wage theft will be a priority of her term in office.

What is wage theft?

Wage theft occurs when an employer doesn’t pay an employee the benefits to which she or he is entitled under the law.  The term may include wages, meal breaks, overtime pay, and any other ‘benefit’ that the employee has earned but not received.

Wage theft does not require an intentional act on the part of the employer. Sloppy record-keeping or poor judgment on the part of a manager regarding an employee’s work time is sufficient to trigger a complaint under the law. Massachusetts treats the failure to pay wages as a civil matter rather than a criminal matter.

From 2017 to 2020, according to one estimate, at least $3 billion in unpaid wages was recovered across the country through the efforts of the US Department of Labor, state wage-and-hour divisions and private rights of action. The industries involved run the gamut from home health care to construction to hospitality.

It is important to remember that non-exempt (hourly) employees must be paid for every minute of time they work in Massachusetts.

EXAMPLES OF WAGE THEFT

Some of the more common examples include minimum-wage and overtime violations. But the list is much longer than that and includes the examples below:

• Withholding an employee’s final paycheck after the employee leaves the job.
• Making illegal deductions from an employee’s paycheck.
• Withholding tips.
• Asking employees to work off the clock or after they punched out.
• Cutting employees’ meal break short or asking them to work through the break.
• Making employees pay for work-related purchases without reimbursement.
• Misclassifying employees to not be counted as employees (i.e., independent contractors).

The phrase “wage theft” is a successful rebranding of terms such as non-payment of wages or wage-and-hour violations. Whatever it’s called, the risk for Massachusetts employers may be significant if they are found to have violated the wage-and-hour laws. Employers can and should take steps to minimize that risk by performing an internal pay practices audit to ensure their compliance with the requirements listed above.

AIM members with questions about this or other human resources topics may contact the AIM Employer Hotline at 1-800-470-6277.